Taiwan so close
Victor Ângelo
Taiwan
is part of our everyday life. This is because the company that produces almost
all of the chips used in electronics, mobile phones, robots and cars is Taiwan
Semiconductor Manufacturing Company (TSMC). An omnipresent but discreet
colossus, worth twice the GDP of Portugal on the stock exchange. And it is pertinent
to write about it this week, when there is so much talk about China.
Since
TSMC produces over 90% of the latest generation of microprocessors and is
located in Taiwan, it is at the centre of the Sino-American rivalry. This is a
major critical point. If there were a conflict over Taiwan tomorrow, the
worldwide availability of chips would plummet. This would mean the immediate
paralysis of motor vehicle factories, computers, mobile phones, highly sophisticated
financial operations, and everything related to the use of micro and nano
transistors. In other words, it would be economic and social chaos.
Analysts
looking at these things say that TSMC is the invisible shield protecting
Taiwan. It may be, to some extent. And TSMC is betting on it: it plans to
invest, over the next three years, $100 billion in expanding its scientific and
technological capacity. More chips, infinitely tiny and of an extraordinarily
more powerful artificial intelligence. The figures give an idea of what is at
stake. They also show that national defence policy involves the development of
an ultra-modern economy that creates strategic dependencies in other parts of
the world.
It
is therefore neither in the interest of Beijing nor of others to destabilise
Taiwan. At least not for the next seven to ten years. But this absolute
dependence on a single company is also the greatest exponent of the fragility
of the major global balances. It is the result of decades of ultraliberalism
and the relocation of production, all of which is out of step with what should
be geostrategic concerns. The prevailing philosophy led us to believe that
commercial interdependence would erase the rivalries between the great blocs of
nations. We now know that this is an illusion. The biggest wars of the last 100
years were started by self-centred madmen who did not take into account the
economic - nor the human - impact of their decisions. I do not think Xi Jinping
falls into that category, despite the words and tone he used yesterday about
Taiwan at the Chinese Communist Party's centenary celebration. But it is also
true that it would only take a highly sophisticated hacker attack against one
section of TSMC to bring thousands of production chains that are dependent on the
availability of chips to a halt.
Joe
Biden understands that the United States cannot, in this vital area, remain
totally dependent on Taiwan and on one company alone. The industrial plan he
has just proposed envisages an investment of $50 billion to stimulate domestic
chip production. To that will be added many billions from the private sector.
The truth is that much of the scientific design work in this field is done by
world-renowned American companies - for example, Intel Corp, Nvidia Corp,
Qualcomm or Cisco Systems Inc. But separating design from production has led to
extreme vulnerability. It is a bit like designing highly effective weapons and
asking others to manufacture them and then supply us.
The
European Union must follow a similar path. One of the starting points should be
to build on what ASML Holding NV already represents. This Dutch company is
dominant in the production of the machinery needed to manufacture
semiconductors. The ambition is to produce in Europe as early as 2030, in
addition to the machines, at least 20% of the new generation of semiconductors.
This is a modest target, but it will still require huge investments in Europe's
digital industries. The amount currently foreseen - around €150 billion - is
insufficient when compared to what TSMC and South Korea's Samsung - the second
largest chip producer - have in the pipeline. However, European sovereignty,
including its defence, requires a decisive presence in the industries linked to
digitalisation.
(Automatic translation of the opinion piece I published yesterday in the
Diário de Notícias, the old and prestigious Lisbon newspaper)
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